Lawsuit filed against city over denial of south Iowa Street shopping center

Chad Lawhorn

This aerial photo from Sept. 5, 2015 shows the interchange of south Iowa Street and the South Lawrence Trafficway. A shopping center project called KTen Crossing was proposed at the southeast corner of the interchange, below center.

The city of Lawrence is getting sued over its denial of a proposed shopping center at the South Lawrence Trafficway and Iowa Street interchange.

A lawsuit by landowners and developers was filed Friday in Douglas County District Court alleging that the city used an “improper and illegal basis” for denying a proposed shopping center that would have added about 250,000 square feet of new retail space to the south Iowa Street corridor.

City commissioners on Jan. 5 voted 4-1 to deny rezoning and other planning approvals for the proposed KTen Crossing shopping center project, which was slated for about 60 acres of farm ground at the southeast corner of Iowa Street and the SLT interchange.

Commissioners cited concerns about whether the shopping center proposal was suitable for the area, which is just north of the Wakarusa River, and whether the city was prepared to grow south of the South Lawrence Trafficway, which is scheduled to be completed later this year.

The lawsuit — which was filed on behalf of property owners Armstrong Management, Grisham Management and the development group SLT, LLC — argues that was a bogus reason for denial.

“Development and city infrastructure is already occurring south of the SLT,” the lawsuit, filed by the Kansas City law firm Polsinelli PC, reads. “Nevertheless, the City Commission’s supermajority selected an arbitrary and capricious reason for denying the applications: The city is not ready to cross over to the south side of the SLT.”

An attempt to reach a city official for comment wasn’t immediately successful.

Other arguments made in the lawsuit include:

• The proposed shopping center plans “generally comply” with Horizon 2020, the city’s comprehensive land use plan. That plan envisions auto-related commercial uses developing on at least a portion of the proposed shopping center site. The development group was seeking to develop a regional shopping center at the site, which would have included big-box stores, restaurants and other retailers. The city’s auto-related commercial designation would not have allowed big-box stores, but instead envisioned auto dealerships, hotels, fueling centers, or other such uses that attracted motorists off the highways that run by the site. City officials have contended the big-box retail shopping center would be significantly more intense than an auto-related commercial center. The lawsuit disputes that contention.

• The plaintiffs allege the general public will be harmed by the city’s denial because the property is now likely to sit vacant or remain underutilized. “The public, because of the city’s action, has missed retail shopping opportunities, job opportunities (nearly 500), an opportunity for an attractive southern ‘gateway’ to the city, and missed sales and property tax opportunities,” the lawsuit reads.

• The attorneys argue the city has placed the property in a “holding pattern” that is unfair to the property’s owners. The property was annexed into the city limits in 1979, and has been zoned for single-family residential use since that time. But the property has never developed in that fashion, and the lawsuit contends the city has never intended for the property to develop with single-family homes.

Attorneys for the city will have a chance to file an answer to the lawsuit in the coming weeks.

Representatives with North Carolina-based Collett development previously said Academy Sports, Old Navy, HomeGoods and several other retailers had either signed letters of intent or made other commitments to locate at the project.

A representative of the development group wasn’t available for comment on Friday afternoon, and an attempt to reach the plaintiff’s attorney also was unsuccessful.